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Historians of Barack Obama’s political career have always noted that he’s been pretty lucky when it comes to his opponents. 2012 certainly will not change that narrative. It seems to me that the Republicans are now faced with a bad choice between Romney and Gingrich-either one will lead to self destruction.

The Republican establishment clearly is scared witless by the prospect of Gingrich being their standard bearer. Last night Matt Drudge brought the full weight of his huge reach to try to destroy Gingrich. His banner , “Insider: Gingrich repeatedly insulted Reagan” linked to NeoCon kingpin Eliot Abrams National Review takedown of Gingrich’s pretension to carrying the Reagan mantle. In another lead link, Drudge links to Emmet Tyrrell (Bill Clinton’s nemesis) who writes of William Jefferson Gingrich.

Newt and Bill are 1960s generation narcissists, and they share the same problems: waywardness and deviancy. Newt, like Bill, has a proclivity for girl hopping. It is not as egregious as Bill’s, but then Newt is not as drop-dead beautiful. His public record is already besmeared with tawdry divorces, and there are private encounters with the fair sex that doubtless will come out.

It may be that the combined weight of Drudge, the National Review, George Will and Anne Coulter trashing Newt may influence the vote in Florida, but if Newt is smart in tonights debate, he will continue his line that “the elites” (right and left) hate him, and he is proud of that.

But if the GOP establishment attacks work, then the party is left with Romney as the candidate. And that would be equally disastrous. Romney releasing last year’s tax returns will not be enough for the Democrats. Because at some basic level the average American says, “why did he need Swiss and Cayman Island offshore accounts if he wasn’t trying to hide something?” Gingrich previewed the Democratic attack line yesterday.

“You have to live in a world of Swiss bank accounts and Cayman Island accounts, and making $20 million for no work, to have some fantasy this far from reality,” Mr. Gingrich said when asked about Mr. Romney’s suggestion that illegal immigrants could be persuaded to “self-deport” from the United States.

But that’s just the start. Already good investigative reporters are starting to ask very pointed questions.

In the wake of news reports last week that presidential contender Mitt Romney owns an individual retirement account worth as much as $101 million, questions are growing over how it could have gotten so big when contribution limits are capped at $5,000 or $6,000 a year.

As one wag pointed out, Romney would have to be 3000 years old to accumulate that much in an IRA if he had played by the rules. Of course by undervaluing assets he put into his Cayman Island IRA, he could escape the tax burden, but in the world of Presidential politics, this is too clever by half.

As for the President, he is on a roll. The economy is improving and since he was inaugurated the Dow has almost doubled, moving from 6469 to 12,791. Moreover he has realized that he must fight a populist campaign for the soul of America. Having Romney as his opponent is the perfect foil and he laid out the electoral challenge in his State of the Union.

We can either settle for a country where a shrinking number of people do really well while a growing number of Americans barely get by, or we can restore an economy where everyone gets a fair shot, and everyone does their fair share and everyone plays by the same set of rules.

I think the President’s chances of reelection get better every day.

A rainy Saturday in Los Angeles seems like a good time to put down some random thoughts.

The SOPA Battle

So SOPA is dead, and as I said earlier in the week, it was a fatally flawed piece of legislation. But before the Free Culture crowd gets too self-righteous, please consider your new hero and spokesperson, Kim Dotcom.

Kim’s a fun loving guy with 30,000 square foot mansions in three countries, a fleet of Ferraris all made possible by selling stolen content from artists around the world. A bunch of the musicians I worked with in the 1960′s and 1970′s, who made wonderful records that are still on everyone’s I Pod, have seen their royalties cut by 80%. Not enough for a retired 70 year old to live on. American’s are truly stupid when it comes to discussing this issue. The one thing we make that everyone else in the world wants to get a hold of–our music, our movies, our video games—the knuckleheads on the copyleft want to fight a death match to make sure they are free to the whole world. Of course these same people don’t mind paying an arm and a leg for their German car or their Japanese TV. Read more…

Obama and Google's Eric Schmidt

The White House has weighed in on the Online Piracy Act. They are clearly walking a tightrope between two competing powers, both of which have traditionally supported Democrats. On one side there is Hollywood and the music industry and on the other is Google. There has been an incredible amount of misinformation floating around about piracy for years and of course there are also some real bully boys who will threaten anyone who opposes their right to “free culture.” We have had these battles for two years on this blog. So here is my thoughts about all of this.

Google- The world’s largest search engine has made hundreds of millions allowing makers of pirated or counterfeit goods to advertise using Google Ad Words. It signed a non-prosecution agreement with the Federal Government and agreed to forgo $500,000,000 worth of counterfeit drug advertising. Google does not want to stop the worldwide revenue it gets from pirated content advertising. Google and it’s competitors could eliminate the need for Piracy legislation by immediately adopting the following rules:

1. We won’t sell advertising on pirate websites.
2. We won’t have our search engine link to pirate websites that can’t prove they have legitimate licenses to the content they host.
3. We will stop pretending we can’t control what gets posted on You Tube.

Hollywood and the Music Business- What I can’t figure out is how did movies and music get to a position that the public feels they are entitled to these works for free? So you never feel you are entitled to a meal at a restaurant for free, do you? What is it about digital entertainment: movies, music, TV and very soon, books that makes them special? Why should the worker in these business not get paid? We built a knowledge society, and the best products we export are all digital objects of desire. But no one seems to care about the notions of intellectual property. It’s so self destructive.

So the President has to thread the needle. That’s why the statement yesterday from the White House was important.

We expect and encourage all private parties, including both content creators and Internet platform providers working together, to adopt voluntary measures and best practices to reduce online piracy.

Google could begin these voluntary measures listed above and reduce the pressure to push a flawed act through Congress. Without some middle ground this whole discussion is going in a very stupid direction.

Democrats should be rooting for Mitt Romney to win the Republican nomination. A new Pew poll shows that Romney is the perfect opponent for Obama

About two-thirds of Americans now believe there are “strong conflicts” between rich and poor in the United States, a survey by the Pew Research Center found, a sign that the message of income inequality brandished by the Occupy Wall Street movement and pressed by Democrats may be seeping into the national consciousness.

What is astonishing about the Pew Poll is that 55% of Republicans believe that income inequality is a serious issue and the largest strain in American society. This of course is why both Gingrich and Perry believe they can run against Romney as a Vulture Capitalist. Let’s hope Mitt wins South Carolina so he can represent the 1% in the election.

Romney, with all his, “I will insist on a military so powerful no one would think of challenging it” bluster, got 39% of the vote in New Hampshire. The next two candidates, Paul and Huntsman, who both say we should withdraw from Afghanistan today, got 40% of the vote combined. Neither Huntsman nor Paul are going to win the Republican nomination.

What is the Obama campaign doing to recruit the anti-war Republicans in August?

As you know, I believe we are experiencing a national mental breakdown–a Crack-up. Last night’s night’s Iowa Caucus only reinforced the idea that our politics is getting separated from reality. Tom Friedman pointed out this morning the dialectic of the Republican race.

Two things have struck me about the Republican presidential candidate debates leading up to the Iowa caucuses. One is how entertaining they were. The other is how disconnected they were from the biggest trends shaping the job market of the 21st century.

But when truth and fiction become indistinguishable, certain insights can still be drawn. And these insights are not without their power to elucidate the greater facts of our current economic and spiritual crisis.

Take the coming battle of Mitt Romney and Rick Santorum. Is it not the climax of Oliver Stone’s Wall Street? Is Mitt Romney not Gordon Gekko, lion of the leveraged buy-out, destroyer of jobs? And isn’t Rick Santorum the working class Martin Sheen character who will fight Gekko with every fiber of his soul. Read more…

I had dinner last night with one of the most important conservative media voices in America and some of his friends. I had gone to the dinner expecting some fireworks, but was totally caught off guard by his charm and what he had to say.

First, he was disgusted by “the pygmies” in the Republican Presidential Race. As much as he dislikes Obama, there was not a one of the current Republican candidates that he could be enthusiastic about.

Second, we found ourselves in agreement that the issue of Crony Capitalism is perhaps the most pernicious threat to our Republic. Crony Capitalism distorts everything from Crop subsidies flowing to agribusiness to our inability to cancel useless Pentagon weapon systems. And the disease effects both political parties.

As the evening progressed I kept trying to move us beyond the Left-Right dialectic we are trapped in and to suggest that we might find some common ground in the liberal principles that are the basis for our Republic:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

Now the word “liberal” is seen as poisonous to conservatives, but it’s origins in John Locke’s Natural Rights theory were the basis for our revolution. Read more…

Apple Store-Shanghai

I have been known to make occasional predictions about our economy, and this quiet time between Christmas and New Years leads me to venture once again into these waters.

In general I feel that the incessant Chicken Little “sky is falling” rhetoric coming out of the media is creating opportunities in the American stock market. When Apple is selling at a P/E of 14 and I can buy Chevron at a P/E of 8 with a 3% yield, good quality companies are selling cheaper than I can remember. Europe may have a financial crisis, but remember after 2008 the ECB did relatively little to shore up their banks. The stress tests were pathetic compared to the ones forced on the U.S. banks. Germany and France are rich enough to fix this problem and since they have both benefited from the Euro, I doubt they will let it crash. The temporary problems of European banks does however provide an opportunity for U.S. Multinationals to raise their game. Procter and Gamble competes with Unilever all over the world to sell shampoo and detergent. Unilever depends on European banks for lines of credit and my guess is that P & G’s cost of capital is cheap compared to Unilever.

Speaking of cost of capital. Despite the hand wringing from Republicans, the U.S. Treasury’s cost of capital is at an all time low. What does that tell you? That the rest of the world sees the U.S. as the best bet for the future. Part of this Republican meme about the “decline of America” is based on 19th Century notions of measuring trade. In David Ricardo’s time, the fact that England was a manufacturing powerhouse that exported to high value goods to Portugal and Portugal was a rural country that exported wine to England gave them each a comparative advantage in their sector. But when Apple assembles an I Pad in China and imports it into the United States it adds $500 to our trade deficit. But where is the great value captured in the product? By Apple shareholders, because the Chinese labor component is a tiny fraction of the selling cost? So traditional economics is totally distorting our real strength in the world economy.

This is not to say that there isn’t a job crisis in America as our less educated workers are caught in a global labor price arbitrage with Korean and Chinese workers. But this too will sort itself out in the next ten years as huge numbers of Baby Boomers retire. Even now, many companies are trying to hold on to Boomers with hard to replace skills past their retirement age. I’m well aware that there are a few Thirty-somethings who troll this blog that are totally frightened that they will never live as well as their parents. It is kind of pathetic because rather than adopting the obvious solutions to shore up their retirement prospects like removing the cap on Medicare and Social Security payroll deductions on high earners and drastically cutting back the defense budget, they are trying to start a generational war by scapegoating my generation and stealing their pensions.

I try to teach my students that one of America’s great understandings is the link between art and science. Hold up your I Phone and you intuitively get that. I’m pretty confident we can continue to excel as long as we somehow get our politics straightened out. That of course will be the task in front of us for 2012.

The first post of this blog was exactly four years ago. It’s been a long strange journey and yet I’m struck by how much I feel the same mixture of hope and foreboding. As to hope, I am still struck by the creativity of my family and close colleagues. I am still in awe of a few artists who seem to be able to make music or films with a passionate commitment to truth and beauty. And despite the disappointments, I still have an essential faith in the humanity and intelligence of Barack Obama. And the foreboding that I felt four years ago, before the Great Recession had struck, still is in place.

And then you ask–so where does the aforementioned dread come from? It comes from a sense of profound economic peril. We have lived as a country off the rich inheritance of past generations and now the party may be coming to a close.

This has been a revolutionary year. Some would compare it to 1848, 1917 or 1968. Look at the Pictures of the year as organized by the New York Times and you can’t ignore the interregnum upheaval we are experiencing. I chose the photo of the young Egyptian revolutionaries at their computers as the quintessential image of “the old is dying and the new is struggling to be borne” that defines the Interregnum. These kids give me hope and I was struck by the words of their young Russian counterpart, Aleksei Navalny at the massive anti-Putin rally in Moscow yesterday.

“Where is this man?” Mr. Navalny asked. “Can you see him? Is he here?”

He added: “These days, with the help of the zombie-box, they are trying to prove to us that they are big and scary beasts. But we know who they are. Little sneaky jackals! Is that right?” The crowd roared. “Is that true or not?” Another roar.

Of course we have our own battles with the forces that control “the zombie-box” in America. For all our idealistic belief in the liberating power of the Internet, most of our citizens still get their information from television–Fox News, CBS, ABC and NBC. And of course there is the large minority that gets no news at all, but rather sits like Mr. Navalny’s zombies zoned out on the fake spectacle of Wrestling or the lives of the Kardashians. Near the end of a presidential campaign all the advertising goes to reach these zombies–people who for some reason in late October of a Presidential race have been paying so little attention that they are still “undecided”. WTF! These cretins get to decide a close political race?

And you can bank on it that Karl Rove’s $500 Million Super Pac will have some killer ads to wake these moron’s out of their stupor just long enough to get them outraged enough to drag their sorry asses to the polls on the first Tuesday in November. Somehow, I can guarantee you that Obama will be painted as “un-American” and the Know-Nothings will drink a couple of Red Bulls and be driven to the polls to pull the lever of Democracy.

So let’s hope we can be inspired by the young activists in Cairo, Moscow, Damascus, New York, Oakland and all the points around the globe where citizens are trying to make the word “democracy” have some meaning. For me, that means going back to Localism. Trying to make Los Angeles the most livable, just, optimistic and creative city on the planet.

Merry Christmas and Happy Holidays,

JT

Bernard Marcus

Our some time correspondent, Tennessee William Shakespeare sent me a link and I wrote a friend who used to work for Bloomberg News to ask if this story, written by one Max Abelson for Bloomberg Business Week was tongue in cheek. He replied no, it was totally serious.

Dimon, 55, whose 2010 compensation was $23 million, joined billionaires including hedge-fund manager John Paulson and Home Depot Inc. co-founder Bernard Marcus in using speeches, open letters and television appearances to defend themselves and the richest 1 percent of the population targeted by Occupy Wall Street demonstrators.

If successful businesspeople don’t go public to share their stories and talk about their troubles, “they deserve what they’re going to get,” said Marcus, 82, a founding member of Job Creators Alliance, a Dallas-based nonprofit that develops talking points and op-ed pieces aimed at “shaping the national agenda,” according to the group’s website. He said he isn’t worried that speaking out might make him a target of protesters.

“Who gives a crap about some imbecile?” Marcus said. “Are you kidding me?”

I want a reality show where the Billionaires come on every day and talk about their troubles. It could be like the old TV show “Queen for a Day”. The 1 Percenter with the biggest sob story wins a brand new dishwasher.